Uber & Lyft's Attacks on Fingerprinted Background Checks

Uber made the SF Examiner last week for being against fingerprinted criminal background checks. As usual the venture capitalized corporation (VCC) is being given too much credit. Its VCC rival, Lyft, is also against fingerprinting – maybe even more so than Uber.

In any case, the arguments that Uber & Lyft made against fingerprinting before the California Public Utilities Commission (CPUC) hearings for regulating TNCs are almost identical.

I had intended to take part in the latest hearing but I wasn't able to do get my comments together in time. Instead I'll make my arguments here.

Since my favorite TNC attorney is Lyft's General Council Kristin Svercheck (Photo 2012 ), I'll mostly be using her reply comments from the CPUC proceeding (1) for my own comments.

Why Fingerprinting?

Fingerprinted background checks are considered to be the best practice by law enforcement agencies throughout the world including: the FBI, the NSA, the CIA, the US Department of Homeland Security and INTERPOL.

Why? From One Standard for All, “A fingerprint-based check is the only way to verify a person's identity and ensure that criminal records found (if any) are for the right person."

Why? From The History of Fingerprints,  "Fingerprints offer a reliable means of personal identification. That is the essential explanation for fingerprints having replaced other methods of establishing the identities of criminals reluctant to admit previous arrests."

Why? From an INTEERPOL forensic symposium,  "Since a person’s fingerprints are unique and do not change during the course of their life, they can be used to quickly and efficiently confirm or disprove a person’s identity ..."

The main exceptions to this are few rare diseases that affect only a few extended families word wide. The odds are over 3 million to one against a person having these diseases. 

The simple truth is that the best, quick way to know that a person is who they claim to be is fingerprinting.

Lyft's Arguments Against Fingerprinting

According to Councilor Svercheck

"Fingerprinting is not necessary to ensure public safety."

Just to clarify: What she is saying is that the technique that is considered the best way to identify people with criminal pasts – especially people convicted of sexual, violent or dangerous driving crimes –  by the FBI, INTERPOL et al is a waste of time.

If one is going to undermine or disprove a method that has been shown to be effective millions of times by the world's leading experts in identification, one would think that one would have to come up with very strong evidence. You know –  statistics, body count comparisons, etc. 

So what does Lyft give us?

"There is no evidence that ... current TNC background check requirements are not adequate and effective."

A double negative? This is the kind of argument used by attorneys on Law and Order when they are defending the Mafia.

Once again, it should be up to Svercheck to prove that TNC background checks are as effective a deterrent to crime as fingerprinting – not the other way around.

On the other hand, I never suspected the General Council of having sense of humor. I stand corrected for, when it comes to proving that Uber and Lyft's methods don't ensure public safety, the evidence is seemingly endless. It's hard even to know where to start?

How about the Uberx driver with the reckless driving record who killed Sophia Liu? 

Or, the City of Houston's investigation into Uber & Lyft's back ground checks by the FBI which found "several drivers with prior criminal histories including indecent exposure, DWI, prostitution, fraud, battery, assault, robbery and aggravated robbery?"

The investigation was started after an Uber driver who raped an intoxicated passenger was found to have spend 14 years in federal prison. "Houston said that the driver would never have passed its fingerprint-based background check conducted by the FBI."

Or, the Uber driver who exposed himself to a female passenger and was found to have numerous past crimes and traffic violations?

Unfortunately, I could go on and on.

Instead of fingerprinting, Lyft uses "privately administered background checks based on Social Security numbers."

Svercheck spends a lot of time explaining a complicated process but I don't feel the need to waste much ink listing her arguments. Instead,  here's a quick listing of the weakness of name and social security based checks from Mentor – a national mentoring partnership.

• A person can provide a false name and social security number. Over 1% of the 45 million individuals in the FBI criminal database have used over 100 aliases and false Social Security numbers.
• People can have two or more different last names if they have been married more than once. You can miss a criminal record if you only have one name.
• Criminal databases can have mistakes in the spelling of person's name or other relevant information.
• You can have "false positives" where a person appears to have a criminal record because of a crime committed by another individual.

Mentor goes on to say that "A fingerprint-based check is the only way to verify a person's identity..."

In addition, of course, we all know that that social security numbers are constantly being hacked and stolen in various ways. What I didn't know until today was that there are websites to help people create fake social security numbers and identities.

Finally, we have an Uber driver explaining how to get around background checks in ValleyWag,

“[Uber's] background check is done through a third party called Hirease. It consists of filling out your name, address, DL & SSN online. That's it. Every taxi company I worked for required drug screening and livescan fingerprinting at the local police department before being issued a taxi driver permit. … One person could fill out all the info and hand off the approved account to another person. You can't do that in the taxi world ….”

I wonder if it would be possible for a person to file off his or her fingerprints and get job at Lyft? Judging by my own experience of applying to drive for Lyft I think so. One could wear gloves during the 3 minute personal interview. Si, no problema.

This is turning into a bigger project than I anticipated. Council Svercheck apparently thinks than an accumulation of bad arguments will somehow equal one good one. We shall see.


Notes:

(1) REPLY COMMENTS OF LYFT ON ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGE’S RULING AMENDING THE SCOPING MEMO AND RULING FOR PHASE II OF PROCEEDING OF RULEMAKING 12-12-011
June 8, 2015

UBER at SFO: GEO FENCE? WE DON'T NEED NO STINKING GEO FENCE!

According to the SFO ruling granting temporary permits to the TNCs, "All TNC Vehicles not actively loading or unloading passengers shall be parked in the designated staging area ... TNC Vehicles may only enter enter the Airport terminal if carrying an Airport-bound passenger or if a ride request has been accepted from a customer at the Airport."

In addition, there is supposed to be a "GeoFence" around the "Polygon" or perimeter of SFO where the TNC Apps won't work – call it a TNC dead zone. This means that the TNC Apps should only work in the TNC staging area and not anywhere else in or near the Airport.

But, in fact, the SFO doesn't appear to be enforcing its ruling and, of course, Uber drivers are paying little or no attention to it. The following sequence took place on November 16, 2014 between 9:18 pm and 9:28.

Photo One Shows an Uber cruising at the lower level of SFO with its App open and seeking a ride.

Photo Two show that this Uber has accepted an order.

Photo Three show the Uber meeting its customer on the upper level of the International Terminal

Photo Four shows the customer climbing into the faux taxicab ... er... TNC.

This was not an isolated incident. Quite the opposite. These photos were taken by limo and cab driver Douglas O'Conner and he sees more Ubers either hiding out on the top level of SFO or cruising with the app open ever time he drives through.

12-14-2014 An Uber cruises with App available.

12-21-2014 An Uber cruises with the App open. The driver spent half an hour circling the upper level.

1-11-2015 An Uber hangs out on McDonnell Road after the driver spotted Doug following him.

1-22-2015 An Uber hangs out on the upper level of SFO.

For Uber watchers this is hardly shocking. If Uber has ever shown any indication that it intends to obey any rule or regulation I'm unaware of it. This, after all, is a venture-capitalized corporation that is run by a CEO that has never heard a lie that he didn't want to tell himself. This is a corporation that lies to every customer and driver that downloads their App, unaware that they're signed away their rights to collect liability in case of negligence. This is a corporation that refuses to fingerprint or train its drivers. This is a company that makes agreements simply to get regulators off it's back.

And, they've succeeded admirably at SFO. I drove around with Doug on December 14, 2014 and we saw dozens of Ubers hanging out at various places on both the upper and lower levels but we failed to see one single SFO cop checking to see if the Ubers were there.

I recently ran into an Indian cab driver who said that America had become the most corrupt country in the world. He's got a good argument. The Indian government shut down Uber and even issued an indictment against CEO Travis Kalanick. And, China chased them out of the country for not obeying the rules.

Here, in California, the powers-that-be reward them by lowering or eliminating safety standards – let the public be dammed – and Uber still doesn't bother to pay any attention to what weak and pathetic rules they have agreed to follow.

And why should they? Here the long arm of the local law reaches out, not with hand cuffs, but with palms up and wide open.

Final CPUC Comments: Riding Back into the Frey

My comments to the California Public Utilities Commission begin below. But first I want to make a few pre-comments to my comments and add a conclusion that I left out – largely because my thoughts on the subject didn't become clear until after I'd handed in my paper.

For reasons known only to the parties involved, the CPUC has bent over backwards to help the TNC's expand their businesses. This has included lifting or ignoring their own Cease & Desist orders, silencing or ignoring opposition speakers during the Rulemaking hearings, and, of course, working to create a totally unique insurance policy for the TNC's that would enable them to cut their insurance costs and keep their business model intact.

For the TNC business model to work, the TNC drivers have to be able to keep their personal insurance because commercial insurance would simply be too expensive for people using their cars to make a little extra money. If, as the insurance companies have indicated, the TNC drivers would need commercial insurance to transport customers, the TNC corporations would trouble finding drivers.

The other alternative would for the TNC corps to take out fleet policies like taxicab and limo companies carry but these are expensive and would force the TNC to raise their rates - putting an end to one of the main reasons why some customers might prefer the TNC's to taxis.

So they (the TNC's) came up with a new type of insurance policy. Instead of full coverage, the policy gives "per incident coverage for incidents involving TNC vehicles and drivers IN TRANSIT or DURING A TNC TRIP."

If I read this correctly it covers a driver for the period after he or she accepts an electronic hail to the point and time when said driver drops off the customer. Lyft CEO John Zimmer has said he wouldn't show it to anybody because it was a totally unique policy that he didn't want imitated.

And, he's right about it being totally unique but it probably won't be imitated. There may be a reason why nobody has ever written a policy like this before. It doesn't appear to work. 

For instance, the term "in transit" is vague. Does it just mean when a driver has accepted an electronic hail and not picked anybody up yet, or can it mean the time that the drivers spend driving around looking for business? It's impossible to tell from the wording. 

It would also be impossible for the insurance companies to tell whether or when the TNC vehicles are being used for business, which is the main reason why insurance companies insist on commercial insurance for vehicles transporting passengers in the first place.

There could be a lot more said about said about this.  My comments to the CPUC start here:

The CPUC wrote in their decision:

“Each TNC must maintain excess liability insurance policies providing a minimum of $1,000,000 (one million dollars) per-incident coverage for incidents involving TNC vehicles and drivers in transit to or during a TNC trip. The insurance coverage must be available to cover claims regardless of whether a relevant TNC driver maintains insurance adequate to cover any portion of the claim.

We note that the claim that Lyft, SideCar, and Uber do not have insurance is false. The Commission's safety & The Commission’s Safety & Enforcement Division, in entering into settlement agreements with these TNCs, made sure that each of these companies maintained excess liability insurance policies providing a minimum of $1 million per incident. We note PIFC’s comments in this Rulemaking, and note that, even if a TNC driver’s personal insurance does not apply in the event of an accident, the excess liability insurance required by the Commission will apply.”

The CPUC is to be congratulated for finally working out insurance agreements with Lyft and SideCar since both corporations (especially Sidecar) claimed to have million dollars policies in effect long before they actually did.

However, I believe that there are two aspects of public safety that do not appear to be adequately covered by these agreements.

1. The fact that all three TNC’s require both their passengers and drivers to sign terms & agreements that waive the right to receive compensation in case of negligence or an accident while riding in a TNC vehicle. As far as I know the TNC’s are the only forms of public transportation – be it bus, airplane, train, taxi or limo – where customers must sign away their rights to collect liability just to get into a vehicle.

·      Lyft’s Limitation of Liability (1)

·      IN NO EVENT WILL WE, OUR SUBSIDIARIES, OFFICERS, DIRECTORS, EMPLOYEES OR OUR SUPPLIERS, BE LIABLE TO YOU FOR ANY INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES (INCLUDING, BUT NOT LIMITED TO, DAMAGES FOR DELETION, CORRUPTION, LOSS OF DATA, LOSS OF PROGRAMS, FAILURE TO STORE ANY INFORMATION OR OTHER CONTENT MAINTAINED OR TRANSMITTED BY OUR SERVICES, SERVICE INTERRUPTIONS, OR FOR THE COST OF PROCUREMENT OF SUBSTITUTE SERVICES) ARISING OUT OF OR IN CONNECTION WITH LYFT, OUR SERVICES OR THIS AGREEMENT (HOWEVER ARISING, INCLUDING NEGLIGENCE) EVEN IF WE OR OUR AGENTS OR REPRESENTATIVES KNOW OR HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WE DO NOT SCREEN THE PARTICIPANTS USING THE SERVICES IN ANY WAY. AS A RESULT, WE WILL NOT BE LIABLE FOR ANY DAMAGES, DIRECT, INDIRECT, INCIDENTAL AND/OR CONSEQUENTIAL, ARISING OUT OF THE USE OF LYFT OR THE SERVICES, INCLUDING, WITHOUT LIMITATION, TO DAMAGES ARISING OUT OF COMMUNICATING AND/OR MEETING WITH OTHER PARTICIPANTS OF LYFT OR THE SERVICES, OR INTRODUCED TO YOU VIA LYFT OR THE SERVICES. SUCH DAMAGES INCLUDE, WITHOUT LIMITATION, PHYSICAL DAMAGES, BODILY INJURY, DEATH AND OR EMOTIONAL DISTRESS AND DISCOMFORT. 

·      Sidecar’s Limitation of Liability (2)

·       

·      TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, IN NO EVENT SHALL SIDECAR, ITS AFFILIATES, AGENTS, DIRECTORS, EMPLOYEES, SUPPLIERS OR LICENSORS BE LIABLE FOR ANY DIRECT, INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS, GOODWILL, USE, DATA OR OTHER INTANGIBLE LOSSES, THAT RESULT FROM THE USE OF, OR INABILITY TO USE, THIS SERVICE, INCLUDING WITHOUT LIMITATION ANY RIDES FACILITATED BY THE SERVICE. UNDER NO CIRCUMSTANCES WILL SIDECAR BE RESPONSIBLE FOR ANY DAMAGE, LOSS OR INJURY RESULTING FROM HACKING, TAMPERING OR OTHER UNAUTHORIZED ACCESS OR USE OF THE SERVICE OR YOUR ACCOUNT OR THE INFORMATION CONTAINED THEREIN.

·      TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, SIDECAR ASSUMES NO LIABILITY OR RESPONSIBILITY FOR ANY (I) ERRORS, MISTAKES, OR INACCURACIES OF CONTENT; (II) PERSONAL INJURY, INCLUDING DEATH, OR PROPERTY DAMAGE, OF ANY NATURE WHATSOEVER, RESULTING FROM YOUR ACCESS TO OR USE OF OUR SERVICE (INCLUDING RIDES FACILITATED BY THE SERVICE); (III) ANY UNAUTHORIZED ACCESS TO OR USE OF OUR SECURE SERVERS AND/OR ANY AND ALL PERSONAL INFORMATION STORED THEREIN; (IV) ANY INTERRUPTION OR CESSATION OF TRANSMISSION TO OR FROM THE SERVICE; (V) ANY BUGS, VIRUSES, TROJAN HORSES, OR THE LIKE THAT MAY BE TRANSMITTED TO OR THROUGH OUR SERVICE BY ANY THIRD PARTY; (VI) ANY ERRORS OR OMISSIONS IN ANY CONTENT OR FOR ANY LOSS OR DAMAGE INCURRED AS A RESULT OF THE USE OF ANY CONTENT POSTED, EMAILED, TRANSMITTED, OR OTHERWISE MADE AVAILABLE THROUGH THE SERVICE; AND/OR (VII) USER CONTENT OR THE DEFAMATORY, OFFENSIVE, OR ILLEGAL CONDUCT OF ANY THIRD PARTY. IN NO EVENT SHALL SIDECAR, ITS AFFILIATES, AGENTS, DIRECTORS, EMPLOYEES, SUPPLIERS, OR LICENSORS BE LIABLE TO YOU FOR ANY CLAIMS, PROCEEDINGS, LIABILITIES, OBLIGATIONS, DAMAGES, LOSSES OR COSTS IN AN AMOUNT EXCEEDING THE AMOUNT PAID TO YOU BY SIDECAR HEREUNDER OR $1,000.00, WHICHEVER IS GREATER.

As I pointed out in my initial comments (3), these terms print out to more than 20 pages at 12 point type and are impossible to read on a smartphone, meaning that few passengers or drivers know, much less understand, the terms they signed.   

Although these waivers of liability would probably not hold up in a court of law, they have no place at all in the contracts of companies transporting the public.

They also speak to the duplicity and dishonesty (4) with which Lyft and Sidecar conduct their businesses and the need to closely regulate them.

2. The CPUC states that the $1million per incident insurance policies covers the drivers “even if a TNC driver’s personal insurance does not apply in the event of an accident, the excess liability insurance required by the Commission will apply.”

The CPUC appears to assume that once said driver is no longer transporting TNC customers and is driving the car for personal reasons that the driver’s personal insurance would take effect.

However, I believe that this that this is a misreading of the PIFC’s comments (5). The PIFC was not talking simply about a “per incident” basis when they wrote,

 “… the industry standard for personal auto insurance policy contracts is to exempt from insurance coverage claims involving vehicles used for transporting passengers for a fee. Thus, in situations where a vehicle is insured as a private vehicle and is used to transport passengers for a fee, no insurance would exist.”

The PIFC DID NOT specifically write that that “no insurance would exist” only WHEN or WHILE the vehicle is transporting passengers for a fee but IF the vehicle is used for transporting passenger at all.

This was clarified by the last sentence of the paragraph – one that the CPUC left out in it’s ruling. 

“Tracking if accidents have occurred involving such vehicles is difficult, as the insurer will not always have the knowledge that the passenger paid for transport.”

In other words, since it’s often impossible to tell if a vehicle is being used commercially at any particular time, it always must be insured at commercial rates if it is used for commercial purposes at all.

This is a standard insurance practice with taxicabs. If, for example, an individual owns and operates a taxicab by himself, the vehicle still requires commercial insurance even when the driver is using it for personal reasons like grocery shopping or taking his children to see a doctor.

It can be much more difficult tell whether a TNC vehicle is being used to transport passengers then it would be for a taxicab because the TNC’s would have removable markings. In addition, the CPUC’s description of when the TNC’s $1 million policies is vague and ambiguous.

Each TNC must maintain excess liability insurance policies providing a minimum of $1,000,000 (one million dollars) per-incident coverage for incidents involving TNC vehicles and drivers in transit to or during a TNC trip.

But what about the times that the TNC vehicles are neither in transit to a TNC trip nor on such a trip? What about the times that they are working as a TNC vehicles but don’t currently have a ride or hail? Are they covered by the $1million policies at such times or not?

In addition, if a TNC driver who carries only personal insurance causes an accident, he may be covered for the liability by the $1 million but any collision policy he might have would “not exist.” This could result in a severe financial loss for the driver.

All of the above naturally would lead to either the TNC’s or the TNC drivers to giving false information about an accident. And, this would no doubt lead to the general public picking up the bill in terms of higher rates for their personal insurance policies.

Therefore, the TNC vehicles should be required to carry commercial insurance in addition to the TNC’s carrying $1 million per incident policies.

I’m a former insurance underwriter and I think that insurance companies will soon require commercial insurance for individual TNC drivers once they understand the potential problems that I’ve mentioned above – if they are not doing so already. It would be easier for all concerned if the CPUC would clarify the situation by either requiring individual TNC drivers to carry commercial insurance or requiring the TNC corporations to carry $1 million fleet policies listing all drivers and cars covered like taxicab companies are currently required to do.

·      Notes CPUC Final Comments

·      1. Lyft Terms  http://www.lyft.me/terms

·      2. SideCar’s Terms of Service http://www.side.cr/terms

·      3. Ed Healy’s comments to Rulemaking 12-12-0011 Undercover at Sidecar and Lyft: 100,000 Uninsured Rides and Counting p10 & 11.

·      4. Ibid. p. 2-4, 8-11

·      5. Personal Insurance Federation of CA Comments to Rulemaking 12-12-0011